Foreign Service Journal
March 1999, p. 61

Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, 1989-1998. Janine R. Wedel. New York: St. Martin's Press, 1998, 286 pp. $27.95.


Janine Wedel, a professor of an­thropology at George Washington University, has written an incisive, striking study of the effect of some $32 billion in Western grant aid delivered since 1989 to Russia, Ukraine, and the former Soviet satellites in East and Central Europe. Wedel, who interviewed some 1,750 people, tells her story in plain English, so readers are spared the dense jargon that disfigures too many studies like this one.

She concludes that while Western aid to Poland, Hungary, Czechoslo­vakia, and its two successors, the Czech Republic and Slovakia, had some successes, the money and effort expended did not produce commen­surate value for either recipients or their donors. She reports that in 1992 Polish President Lech Walesa pronounced a severe judgment on the Western aid. "It is you, the West, who have maid good business on the Polish revolution," he said. This assessment is shared widely in the region today, even though Poland, the Czech Republic and Hungary have succeeded in making the transi­tion to democratic governments with market economies.

In an article in The Nation last June entitled "The Harvard Boys Do Russia" Wedel examined some of the reasons for the failure of Western aid to Russia. "United States policy toward Russia requires a full-scale Congressional investigation," she wrote. "Any serious inquiry must go beyond individual corruption and examine how U. S. policy, using tens of millions in taxpayer dollars, helped deform democracy and economic reform in Russia and helped create a fat-cat oligarchy run amok." In Collision and Collusion, she expands on these strong words and builds a case against USAID's folly in relying upon the Harvard Institute for International Development to deliver aid to Russia. The institute developed a symbiotic relationship with a group of "reformers" led by Deputy Prime minister Anatoliy Chubais. She refers to this group as the "Chubais clan," and charges that they became gate­keepers for all U.S. aid to Russia.

Wedel uses extensive field work to document USAID's relationship with the institute and the Chubais clan. She concludes that it led to a disaster for U.S. efforts to help Russia make the transition from socialist to a market economy. She also describes how Western governments set up aid programs that operated through disparate organizations that acted as rivals, neglected to communicate their plans and objectives to one another, and inadequately determined the needs and priorities of countries receiving aid.

In defending this type of structure, many U.S. and Western European officials Simply commented, ''We didn't do a Marshall Plan." The Marshall Plan used strong American and European administrators who found capable entrepreneurs to help restore Western Europe following World War II, but the task of re­building Eastern and Central Europe was more complicated and demanded more of aid donors than did the task of rebuilding Europe after 1945. After 1989, while it was still possible to find people in Eastern and Central Europe who had not forgot­ten the economic laws of modern industrialized societies, such people had long ago disappeared from the former Soviet Union. Most importantly, after the fall of the Berlin Wall, Western governments, led by the United States, sharply lowered the priority of their relationships with the countries of Eastern Europe and the former Soviet Union.

Collision and Collusion documents what harm results when aid donors fail to exercise responsible, high-level leadership and oversight. It contains the stuff of today's headlines, and perhaps the seeds of tomorrow's debate, particularly if Americans should ever have to confront the question, "Who lost Russia?

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